This year didn’t quite meet industry expectations on a number of fronts. First, after getting off to an encouraging start, sales began to fizzle come September — later though than when sales stalled in 2011. Industry executives reported that while sales remain in the low single digits, mainly between 3 and 5 percent, they are confident that the trend is heading back up.

In addition, the expectation was that the builder market would continue to lag while growth was set to come from the residential sector. But that didn’t quite happen either. Most growth came from the builder market which tends to use value or moderate priced flooring, according to industry executives. The replacement business, which didn’t ramp up as expected, typically offers suppliers the opportunity to sell better goods.
“There’s more uncertainty in the marketplace,” said Russell Grizzle, CEO of Mannington. “We had forecasted this as the big turnaround year. We thought this was it. It got off to a good start in the first quarter and then slowed down and we had to make adjustments.” Despite this, Grizzle said the company continues to grow and 11 months in, the company is ahead of projections.

Brian Carson, president of Mohawk said that while the market has been relatively flat, it does show encouraging signs. “The economy is on the upswing. It’s going to be choppy but on the improvement side,” he said.
Kevin Biedermann, senior vice president, residential flooring at Armstrong, said 2012 is the start of a recovery and that while the market’s 3 percent growth was on target with what was forecasted, it didn’t come the way the company had expected.

“We thought, all in, the market would be up around 3 percent — better than flat but not incredibly robust. What we thought is we’d get a little bit in new construction and a recovery in the remodel, repair and renovation market,” Biedermann said. “Eleven months in, the new construction market is better than expected and we think that will continue. What we have not seen is the return of the remodel market. For us and for most folks, that’s the larger market — probably about 75 percent.”

Still, Biedermann said that the market is up and the company sees a lot of opportunity. “Folks are looking for solutions to their projects. Consumers are educated, and are using their own money so every penny counts. They are looking for solutions that have value — beyond price point — such as style, quality and performance. These are more important than saving ‘X’ cents a foot. People are saying that they’d rather get what they want and need, rather than regretting a purchase to save a couple of hundred dollars. It’s all about the shopping process, a trusted brand and knowledgeable salespeople who can sell the right product for different solutions.”

Biedermann said the changing landscape “reaffirms Armstrong’s approach which is to offer a value, performance and design story.” He added, “We have been making investments in the downturn and we think we and our partners are very well positioned. Our strategy appears to be working. We estimate we will finish the year significantly better than market.”
While growth in 2012 was modest, according to Shaw president Randy Merritt, he said that the company had success with a number of initiatives taken during the year.

“In 2012, Shaw introduced several new programs and products that were extremely successful and effective in providing our dealers with new tools. Highlights included our new styles under the Anso Nylon brand, expanding our Shaw Web Studio program, solidifying our hold in the carpet tile market with the most eco-friendly high performing products and growing our HGTV HOME Flooring by Shaw collection to include the most stylish and fashionable products in the market today. Every year, we roll out new products using easy-to-shop displays, providing the service our dealers need to secure sales and backing our products with a commitment to social environmental responsibility,” said Merritt.

Shaw remained steadfast in its support of important social programs in 2012. Explained Merritt, “In 2012, we became the second national sponsor of the St. Jude Dream Home Giveaway to benefit the St. Jude Children’s Research Hospital. This represents important corporate social responsibility progress and we are looking forward to developing this partnership in new and creative ways in 2013. Giving back for Shaw is so important and we are very proud to have joined forces with such an influential, life-saving organization with the ability to have a worldwide impact on how children with cancer are treated. This new partnership is incredibly rewarding for Shaw Industries and our partners.”
Increasing raw material prices are impacting just about all product categories. Hardwood flooring makers have already posted price increases in the 6 percent range on both engineered and solid product and vinyl suppliers said that increases in their sector may not be far behind.

Most flooring categories are experiencing growth at opposite ends of the spectrum — at the low end entry-level price points or at the high end — with little movement in the middle. Ralph Boe, CEO at Beaulieu, told FCW that entry level carpet is in demand while the middle market is hurting.

Laminate, too, is performing best with high-end niche product that includes features like handscraping and beveled edges and in the lower end where companies are at battle with cheap imports.
An increase in U.S. production of categories including wood, LVT and tile is also contributing to growth for many suppliers. Mannington is now bringing its commercial LVT production stateside through its acquisition of Amtico. At its December convention, Mohawk showed an increased amount of product made in the U.S. including wood and tile. Other companies too have made moves to bring production here as well.

Most growth has come from the hard surface area. In some cases, tile makers are seeing close to 10 percent increases while LVT continues to rise and wood makers too are realizing meaningful growth.
Handscraped woods and Alterna groutable premium tile are two products in the Armstrong assortment that are helping to grow business beyond the market norm, according to Biedermann. “Our handscraped business has grown amazingly,” he said. “For this year, we invested in technologies that have dramatically improved our competitiveness and we are manufacturing both solid and engineered handscraped products in the U.S. We call the collection American Scrape and introduced the products into the Southwest this summer with terrific results. The collection will be rolled out across the rest of the country first quarter 2013. Alterna also continues to grow. The addition of Alterna Reserve collection and introduction of Alterna 12 x 12 tiles this year continues to drive impressive results.”
Merritt said that Shaw’s hard surface business continues to grow as well, primarily driven by new opportunities in the commercial and residential builder/multifamily segments. “The hardwood business is benefiting from increased new home construction and we have found many opportunities for our resilient products in virtually every segment we sell into,” he said. “Other businesses, such as Shaw Living, Shaw Sports Turf and Manufactured Housing have all shown improvement this year.

“Our Anderson Hardwood business,” he continued, “has been a leader for us in the realm of American-made manufacturing and marketing. The business has undergone positive growth changes and will continue to introduce industry-leading hardwood floors that help further our innovative style and performance advantages.”
Mannington’s strong position in the LVT market — made even stronger by this year’s acquisition of Amtico — is one area that the company saw increases this year. Grizzle said that LVT is growing at virtually the same rate at specialty retail as it is in commercial. “We will continue to expand in LVT,” he said, adding that the company will come out with a substantial amount of product in each of its product categories come January that will continue to drive sales growth for the company.

Mohawk recently held its annual convention and a number of initiatives there, including new product in both hard and soft surface, were aimed at continuing momentum built throughout 2012. The third phase of SmartStrand Silk, the premium super soft carpet first introduced a year ago, launched Nov. 30 at Solutions and displays are set to ship Dec. 12. The new Wear-Dated Embrace soft nylon product was also launched with displays shipping Dec. 12 as well. New laminate and hardwood programs debuted there too.